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Liquidations

Last updated: Aug 28, 2026

Liquidation occurs when your account no longer has enough value to maintain your open positions and meet the required maintenance margin.

When liquidation is triggered, Synthetix may reduce or close your positions or take other actions to restore the account to a healthy state.

This page explains when liquidation occurs, how the liquidation process works, how multicollateral accounts affect liquidation risk, and how liquidation prices and fees are calculated.

When Does Liquidation Occur?

Liquidation occurs when your Adjusted Account Value falls below the maintenance margin requirement for your open positions.

Why Was I Liquidated?

You may be liquidated when your account no longer meets its maintenance margin requirements.

Your liquidation risk can increase when:

  • Your open positions generate losses.
  • Funding payments or trading fees reduce your USDT balance.
  • USDT debt increases relative to your Collateral Value.
  • Haircuts reduce the Collateral Value of supported non-USDT collateral.

See Leverage & Margin and Multicollateral Margin for more information.

How Liquidation Works

Typical sequence:

  1. Margin ratio is checked and liquidation is triggered.
  2. The system attempts to reduce, close, or transfer positions to designated SLP accounts.
  3. A Liquidation Clearance Fee is applied, calculated on notional size.
  4. Collateral can be transferred to designated SLP accounts as part of the liquidation process.
  5. Auto-exchange may run around account health checks when USDT debt exceeds allowed limits.

The simplified margin-ratio view is:

Margin Ratio = Maintenance Margin / Adjusted Account Value

If Adjusted Account Value falls below maintenance requirements, the account can become eligible for liquidation.

Multicollateral Liquidation Risk

Non-USDT collateral is valued at index price and then reduced by a haircut. This means your liquidation risk can change because:

  • Your open position PnL changes.
  • Trading fees or funding reduce your USDT balance.
  • Non-USDT collateral prices fall.
  • Haircut-adjusted Collateral Value falls.
  • USDT debt rises relative to non-USDT Collateral Value.

Maintaining healthy LTV, sufficient Collateral Value, and a buffer above maintenance margin reduces liquidation risk.

Liquidation Clearance Fee

A Liquidation Clearance Fee is applied when a position is liquidated and is calculated based on the notional value of the liquidated position.

  • Varies by market, for example:
    • BTC and ETH: 0.5%
    • SOL and others: 1.0%

How Liquidations Are Executed

Orderbook liquidation (primary path)

When an account becomes eligible for liquidation, the system first attempts to reduce the position by sending a market order to the order book.

  • Liquidation market orders may fully or partially fill.
  • If enough of the position is closed such that maintenance margin requirements are satisfied again, any remaining collateral stays with the trader.

Collateral transfer

When liquidation takes over an account, all collateral types in the affected Sub-Account can be transferred to designated SLP accounts. This includes USDT and supported non-USDT collateral.

Mark Price Used for Liquidations

Liquidations are triggered using the mark price, which is based on external reference pricing rather than a single last traded price. This makes liquidations more robust than using a single instantaneous last trade or book price.

Partial Liquidations

Large liquidatable positions may be liquidated in stages rather than all at once.

For liquidatable positions larger than 100,000 USDT, 20% of the position is initially sent as a market liquidation order. A 30-second cooldown follows each partial liquidation.

Why Does My Liquidation Price Change?

  • The liquidation price shown before entering a trade is an estimate and may be slightly inaccurate.
  • After a position is opened, the entry price is known, but the displayed liquidation price can still change due to factors such as:
    • funding payments
    • unrealized PnL changes in other positions
    • non-USDT collateral price changes
    • collateral withdrawals

Monitoring Liquidation Risk

You can monitor your liquidation risk from several areas of the trading interface.

Before opening a position

The trading interface provides an Estimated Liquidation Price while you are preparing a position.

You may see the estimated liquidation price:

  • On the trading chart.
  • In the Confirm Order window before submitting the order.

The Confirm Order window also shows information such as Margin Used and Fees before you submit the trade.

The Confirm Order window shows Est. Liquidation Price, Margin Used, and Fees before you submit. The chart also marks estimated entry and liquidation prices.

After opening a position

The Positions table displays the position's Liq. Price and Margin Ratio. The Account Balance panel also displays Liquidation Risk, along with Maintenance Margin, Margin Used, and Unrealized PnL.

Monitor these values as market conditions, position PnL, funding, fees, and collateral value change.

After a position is open, monitor Liq. Price and Margin Ratio in the Positions table, and Liquidation Risk, Maintenance Margin, Margin Used, and Unrealized PnL in the Account Balance panel.

See also